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Freshwater UK

  • BY: Andrew Hore |
  • POSTED: 02/07/2009 |

Recently Freshwater UK has been quiet on the acquisition front but it has returned to the fray with the purchase of Life Communications.

The PR and marketing services provider is raising £470,000 through a placing at 36p a share – a tiny discount to the market price. This will help to finance the initial cash consideration of £300,000. There is also a £100,000 payment in shares at 38p each. Deferred consideration of up to £700,000 will be paid depending on performance.

Life has offices in Belfast and Dublin. Specsavers and Walkers Crisps are clients and Freshwater has worked with the firm for a number of years. Life made an operating profit of £146,000 on revenues of £1.09m in the year to June 2008. There should be savings from integrating the business.

At 36.5p a share, Freshwater is valued at £5.06m. House broker Charles Stanley forecasts underlying profits of £500,000 in the year to August 2009, against £1.2m profit the previous year. Profits are expected to recover to their 2007-08 level next year. The shares are trading on 15 times prospective 2008-09 earnings, falling to six next year.

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